Itera

Earnings Release • Feb 17, 2017

The strategy is working

The strategy is working

Oslo, 17th February 2017: Itera achieved revenue growth of 10% in

the fourth quarter of 2016 relative to the same period in 2015. This

growth was achieved through its nearshore activities and its

Norwegian consulting and IT hosting activities, while the revenue

generated by Itera's Danish activities and its product companies in

Norway decreased slightly. Itera achieved revenue growth of 7% for

2016 as a whole.

The Group reports operating revenue of NOK 117.6 million (NOK 106.6

million) for the fourth quarter of 2016, which represents growth of

10%. This revenue growth was largely achieved through the Group's

consulting and IT hosting services, in addition to its nearshore

services. Operating revenue for 2016 as a whole was NOK 423.6

million (NOK 394.2 million), equivalent to growth of 7%.

The Group's total operating costs in the fourth quarter of 2016 were

7% higher at NOK 104.4 million (NOK 97.8 million). Operating costs

for 2016 as a whole totalled NOK 387.2 million (NOK 367.9 million).

The operating result before depreciation and amortisation (EBITDA)

for the fourth quarter of 2016 was a profit of NOK 18.2 million (a

profit of NOK 14.2 million in Q4 2015), and the operating result

(EBIT) before non-recurring items was a profit of NOK 13.2 million

(a profit of NOK 8.8 million in Q4 2015). The operating margin was

11.2% as compared to 8.3% in the fourth quarter of 2015.

The operating result before depreciation and amortisation (EBITDA)

for 2016 as a whole was a profit of NOK 55.9 million (a profit of

NOK 46.1 million in 2015), while the operating result (EBIT) before

non-recurring items was a profit of NOK 36.4 million (a profit of

NOK 26.4 million in 2015). The operating margin in 2016 was 8.6%

(6.7%). Unadjusted EBIT before non-recurring items was NOK 35.7

million (NOK 20.1 million).

Cash flow from operational activities was NOK 36.9 million (NOK 30.1

million) in the fourth quarter of 2016 and NOK 48.4 million (NOK

20.8 million) for 2016 as a whole. With regard to the fourth

quarter, cash flow from operational activities was NOK 18.7 million

more than EBITDA, and this was primarily due to an increase in

accounts payable and other current liabilities.

- We are successful with our strategy of offering a range of

services that cover the customers' business needs from communication

and consulting to development and operations, says Arne Mjøs, CEO of

Itera. - The demand for our services is strong and we need to ramp

up recruitment.

The revenue from Itera's 30 largest customers grew by 12% in the

fourth quarter of 2016 and accounted for 75% of the Group's

operating revenue, up from 70% in the fourth quarter of 2015.

The proportion of Itera's capacity that is located nearshore (its

nearshore ratio) was 37% (35%) at the end of the fourth quarter. The

Group has development centres in Slovakia and Ukraine and has a

strategic target of achieving a nearshore ratio of 50% over the long

term.

The Board of Directors has passed a resolution to propose an

ordinary dividend of NOK 0.18 per share at the Annual General

Meeting on 22 May 2017. It will also ask for its authorisation to

approve possible additional dividends to be renewed.

For more information:

Arne Mjøs, CEO Bent Hammer, CFO

+47 905 23 172 +47 982 15 497

arne.mjos@itera.no bent.hammer@itera.no

About Itera - great experiences for the customer's customers

Itera is a communication and technology company that delivers

services in the strategy and consulting, design and development, and

operations and management areas. Its customers are Nordic

organisations that aim to deliver great

user experiences to their customers, and that see the instrumental

contribution that innovation, efficient communication and good

technology use can make to achieving their goals. Itera is

headquartered in Oslo, and has about

400 employees across the Nordics and in Ukraine and Slovakia. Itera

is listed on Oslo Stock Exchange under the ticker ITE.